RLNG to cost more as SNGPL eyes gains

ISLAMABAD: The top mandarins of Sui Northern Gas Pipeline Limited (SNGPL) have carved out a plan to maximise the advantage out of the LNG import that may lead to more increase in the cost of RLNG (re-gasified LNG) by about $2.5 per MMBTU making the commodity uneconomical for the big consumers that include CNG, fertilizer and even power sector.
According to well-placed sources, SNGPL wants to fleece the RLNG consumers by seeking the current market value of its old assets. For example, it has already been getting the 17 percent rate of return on its assets for long and now it has planned to renew the valuation of the assets at a par with the current market rates and then get 17 percent of rate of return on the renewed valuation of assets.
The story does not stop here, rather it gets a new twist, as the top officials of the gas utility have also made up their minds to fix the new price of those assets which were deprecated to zero 10 years ago and if this desire gets materialized, it will cause huge increase in the RLNG price that will be affecting consumers of CNG, fertilizers and power sector.
The SNGPL also plans to punish the CNG and fertilizer sector with 10.50 percent unaccounted for gas (UFG) in the tariff of RLNG. In case it manages to include the said exorbitant volume of UFG in the tariff, the spirit behind the whole idea of involving private sector in importing LNG will die down as the final tariff of RLNG will surge to the level where it will not be economically sustainable for them to continue their business and provide the products to their consumers at affordable prices.
When this scribe tried to contact MD Sui Northern Mr Arif Hameed many times on his cell phone but he did not pick up the call. A questionnaire was also sent to him seeking his version on points mentioned in the story but no response was received till the filing of this report.
The SNGPL has also pitched the proposal to ECC seeking 50 percent share in the revenue that it will earn on account of usage of its infrastructure for gas transmission and distribution by the CNG, fertilizer sector and IPPs. In case the prime minister gives nod to the proposals, a summary will be sent to the ECC for formal approval.
SNGPL is not willing to give the 100 percent profit to the national exchequer knowing the fact that it has not laid down the new gas transmission and distribution network for provision of gas to the CNG and fertilizer sector as it will use the old gas distribution system.
Though determination of the UFG is the domain of Ogra, the gas utilities want to charge the maximum UFG from the LNG consumers arguing Ogra has nothing to do with the UFG issue when it comes to private consumers of LNG.
The SNGPL says that average price of gas across the country stands at Rs380 per MMBTU and 10 percent of the said price is the UFG. The officials said that SNGPL wanted to charge losses of other consumers from the CNG sector which is sheer injustice. The official also said that private sector had agreed to pay the price of UFG but for the loss that was registered only in the CNG sector.
He stated that private sector wanted to get the UFG in the CNG sector verified in audit accounts of the companies before paying the price of the verified UFG. However, the CNG sector is not ready to allow the SNGPL to cut the volume of gas in the head of UFG.